Cemtrex (NASDAQ:CETX – Get Free Report) and ScanSource (NASDAQ:SCSC – Get Free Report) are both small-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.
Profitability
This table compares Cemtrex and ScanSource’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cemtrex | -38.59% | -129.15% | -45.98% |
| ScanSource | 2.44% | 10.10% | 5.11% |
Earnings and Valuation
This table compares Cemtrex and ScanSource”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cemtrex | $71.17 million | 0.02 | -$28.11 million | ($81.19) | -0.01 |
| ScanSource | $3.23 billion | 0.31 | $78.87 million | $3.66 | 13.56 |
ScanSource has higher revenue and earnings than Cemtrex. Cemtrex is trading at a lower price-to-earnings ratio than ScanSource, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Cemtrex has a beta of 2.15, meaning that its share price is 115% more volatile than the S&P 500. Comparatively, ScanSource has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings for Cemtrex and ScanSource, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cemtrex | 1 | 0 | 0 | 0 | 1.00 |
| ScanSource | 0 | 3 | 1 | 0 | 2.25 |
ScanSource has a consensus price target of $51.00, suggesting a potential upside of 2.79%. Given ScanSource’s stronger consensus rating and higher possible upside, analysts clearly believe ScanSource is more favorable than Cemtrex.
Institutional & Insider Ownership
2.0% of Cemtrex shares are held by institutional investors. Comparatively, 97.9% of ScanSource shares are held by institutional investors. 3.2% of ScanSource shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Summary
ScanSource beats Cemtrex on 13 of the 14 factors compared between the two stocks.
About Cemtrex
Cemtrex, Inc. engages in the provision of solutions in the technology industry. It operates through the following segments: Security, Industrial Services, and Cemtrex Corporate. The Security segment provides end-to-end security solutions to meet corporate, industrial, and governmental security challenges. The Industrial Services segment offers single-source expertise and services for rigging, millwrighting, in plant maintenance, equipment erection, relocation, and disassembly to diversified customers. The Cemtrex Corporate segment refers to the holding company of the other two segments. The company was founded on April 27, 1998 and is headquartered in Hauppauge, NY.
About ScanSource
ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.
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